The Trump administration's new regulation expanding short-term health insurance plans contains what amounts to a legal life preserver in case a key feature is struck down by a court.
The administration expects premiums for Obamacare plans to increase by 1% next year and by 5% in 2021 because of the shifts.
Since Congress failed to repeal the Affordable Care Act previous year, President Donald Trump has attempted to weaken the program through eliminating protections, discouraging enrollment, and driving up costs, the lawsuit argues. The alternative plans may be much cheaper than those offered under the ACA because they're not required to cover as many medical services and can exclude people with pre-existing conditions. "This will make a low-priced option like short-term insurance even more attractive, particularly if insurers further adapt their benefits and conditions of coverage to better align with the needs of the unsubsidized population". Now, short-term plans can span an initial period of less than 12 months and can be extended for 36 months at maximum. But the policies for individuals have no guarantees of coverage for existing medical conditions and come with limited benefits.
Larry Levitt, a senior vice president at Kaiser, said the expansion of short-term health plans would help provide some relief for some healthy people - but at the expense of others in the Obamacare markets. Short-term, limited-duration health plans are not considered "health insurance" under federal law, and as a result, they do not have to comply with the Affordable Care Act.
Administration officials estimate plan premiums could be half the cost of the more comprehensive ACA insurance. In Q4 of 2016, the average monthly premium for an individual beneficiary for a short-term, limited-duration plan was $124, compared to almost $400 for an unsubsidized individual market plan. This could have the effect of driving premiums slightly higher on the ACA exchanges, because healthier people will leave the market, according to the CBO. State insurance regulators also have jurisdiction, and many states may move to impose their own restrictions.
The expanded plans will be able to go on sale in two months, or as long as it takes for state regulators to approve them.
Also, short-term plans don't have to offer comprehensive coverage.
The move would reverse an Obama administration decision to limit the duration of short-term plans to no more than 90 days in order to make them less attractive.
Adversaries of the plans are calling them "junk insurance".
It's not clear CT consumers will be able to purchase the plans. Letsos picked the plan to preserve access to the top hospitals and doctors in her hometown.
Officials are hoping short-term plans will fit the bill. No one is above the rule of law, including the U.S. President.
Until now, the health-care law had a built-in deterrent for those considering short-term plans. Other insurers were more neutral, and companies marketing the plans hailed the development. The company has also requested to review five years of her medical history before paying for her care.
The U.S. Department of Health and Human Services did not immediately respond to a request for comment.
But short-term insurance clearly has fewer benefits.
"These new short-term plans are nothing short of junk insurance and are so unsafe for Americans that it's no wonder not a single group representing patients, physicians, nurses or hospitals has voiced support", Schumer said in a statement.
Unable to repeal much of the Obama-era law, Trump's administration has tried to undercut how the law is supposed to work and to create options for people who don't qualify for subsidies based on their income.
"We continue to see a crisis of affordability in the individual insurance market, especially for those who don't qualify for large subsidies", CMS Administrator Seema Verma said in a statement. Only one insurer - Blue Cross and Blue Shield of North Carolina - offers insurance on the Obamacare marketplace in most of his state.
Smith was rejected after the insurer found out he had a skin cancer lesion removed years ago, and chose to go without insurance.
"To restore these to 364 days - as originally drafted - is exactly what we are looking for", said Jan Dubauskas, general counsel for the IHC Group, speaking before the final rule was released.